Amendment of section 123.
32. In section 123 of the principal Act,-
(a) in sub-section (1),-
(i) in clause (a),-
(A) for the words "both; or", the word "both:" shall be substituted;
(B) the following proviso shall be inserted, namely:-
"Provided that in computing profits any amount representing unrealised gains, national gains or revaluaiton of assets and any changes in carrying amount of an asset or of a liability on measurement of the asset or the liability at fair valus shall be excluded; and";
(ii) in the second provision, for the words "transferred by the company to the reserves", the words "transferred by the company to the free reserves" shall be sustituted;
(b) for sub-section (3), the following sub-section shall be substituted, namely:-
"(3) The Board of Directors of a company may declare interim dividend during any financial year or at any time during the period from closure of financial year till holding of the annual general meeting out of the surplus in the profit and loss account or out of profits of the financial year for which such interim dividend is sought to be declared or out of profits generated in the financial year till the quarter preceding the date of declaration of the interim dividend:
Provided that in case the company has incurred loss during the current financial year up to the end of the quarter immediately preceding the date of declaration of interim dividend, such interim dividend shall not be declared at a rate higher than the average dividends declared by the company during immediately preceding three financial years.".
